What the new tax bill means for homeowners

by | Jan 21, 2018 | Blog

The Republican tax cuts passed in 2017 will have sweeping effects on the country, including the pocketbooks of homeowners. As such, it has drawn the attention—and concern—of the National Association of Realtors (NAR).

In a recent press release, the NAR notes that the final bill is a mixed bag: “Although the final tax reform bill is far from perfect and the results are mixed, it is significantly better for homeowners than previous versions.”

What does the bill mean for homeowners? Here are some of the pertinent items:

Capital gains exclusion: The past law remains in place: Capital gains taxes are excluded on $250,000 for individuals and $500,000 for married couples on the sale of a home.

Mortgage interest deduction: The past law allowed for mortgage deductions up to $1 million. The new bill allows for only $750,000. This is an increase from the $500,000 the House initially proposed.

State and local tax deductions: Congress had intended to eliminate the state and local income tax deduction altogether; instead, property taxes and state and local income taxes can be deducted up to $10,000 under the new bill.

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